Facebook's Stock Value Drops by One Third

#Money

Tue, May 29th, 2012 20:00 by capnasty NEWS

I'm sure Google is quietly laughing as they watch Facebook's stock drop further down the drain.

"People are disillusioned," Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor Inc. in Cincinnati, said in a telephone interview. He doesn't own shares of Facebook. "A lot of investors believed the hype," he said. "In this type of volatile market environment, people are not going to take chances."

Facebook shares climbed as high as $45 on May 18, when the shares ended the day with a price-earnings ratio of 83.1, making the Menlo Park, California-based company more expensive than 99 percent of Standard & Poor's 500 Index stocks. The company went public as the equity index was heading for its biggest monthly decline since September.

There have been suggestions that Facebook should buy RIM, the company that makes the Blackberry, to produce its recently announced Facebook phone, potentially saving both from imminent disaster.

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